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Rogan v. Auto-Owners Insurance Co.8/13/1991
Auto-Owners Insurance Company (Auto-Owners) and LeBaron & Carroll, Inc. (LeBaron & Carroll) appeal from the trial court's judgment and jury verdicts in favor of the appellees. The appellees have filed a cross-appeal from the judgment against both Auto-Owners and LeBaron & Carroll. Although numerous issues are presented in this appeal, we exercise our discretion to address only the issue of Auto-Owners' liability for the excess judgment entered against its insured in this opinion. See Rule 28(g) (1990), Arizona Rules of Civil Appellate Procedure. The remaining issues are addressed in a memorandum decision.
FACTUAL BACKGROUND
The underlying dispute in this case involves insurance coverage for a 1971 Mack tractor. The tractor was owned by Parker Concrete, a redi-mix concrete business in Payson, Arizona. On February 4, 1984, Ed Largo, an employee of Parker Concrete, collided with a motor home while driving the 1971 Mack tractor. The accident injured the passengers of the motor home, Tom and Mary Rogan, Ruth Fry and Larry Foster (motor home plaintiffs). Largo was cited for crossing the center of the road.
Kyle and Lanette Parker owned and operated Parker Concrete. Their insurance carrier was Auto-Owners Insurance Company, and their agent was LeBaron & Carroll. On August 12, 1983, the Parkers wanted to add the 1971 Mack tractor to their policy. LeBaron & Carroll, however, misdescribed the Mack tractor on the policy as a 1971 Mack trailer.
On October 24, 1983, Lanette drove to Mesa to pay an insurance premium. She met with Roberta Speltie, a LeBaron and Carroll employee, and while there, noticed the misdescription of the tractor. Lanette requested that it be changed, and that a 1969 Freightliner be added to the policy.
Roberta claims that Lanette told her to either change the trailer to a tractor or delete the tractor from the policy. In either case, Roberta said the request had to be in writing.
On November 2, 1983, LeBaron & Carroll received the following letter from Lanette:
ATTENTION: BOBBIE
Here is a letter of lien clearance on Mack tractor. You have it listed as a Mack trailer. Please cancel this Mack tractor. Please add: 1969 White Freightliner -- Value: $10,000.00
Here are the serial numbers you asked for:
1973 International mixers:
79795C1B16305
7979SCG13452
1971 Ford mixer: Y80CVL72351
Value: Mixers: $8,000.00 Each
(Signed) Lanette A. Parker
Based on this letter, LeBaron & Carroll claims that it sent Auto-Owners a request to delete the 1971 Mack tractor. Auto-Owners contends that it never received the request and the Mack remained on the policy. On January 26, 1984, David Cummard, an agent at LeBaron & Carroll, and John Carroll visited Kyle while on business in the Payson area. Kyle testified that he gave Cummard a check for the premium due on the insurance policy and that he reviewed the declaration sheets. He testified that he told Cummard that the tractor was still listed as a trailer and that he wanted coverage on the tractor. Auto-Owners claims that Kyle told Cummard to delete the 1971 Mack from the policy.
The Parkers notified LeBaron & Carroll of the accident on February 6, 1984. LeBaron & Carroll informed the Parkers that there was "a problem with coverage." Kyle, his brother Wade, and Wade's father-in-law Lufken Hunt, drove to Mesa the next day to meet with representatives of LeBaron & Carroll. The parties discussed the "coverage problem" and Milo
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